Interim Results - Part 2

British Telecommunications PLC
8 November 2001

PART 2

The half-year report, which contains the independent review report of the
auditors, will be advertised in the Financial Times on November 9, 2001.

The third quarter and nine months' results of BT Group are expected to be
announced on February 7, 2002.

GROUP PROFIT AND LOSS ACCOUNT

for the three months ended September 30, 2001
                                 BT       mmO2   Discontinuedactivities  Total
                                 Group              and eliminations
(unaudited)                Notes £m        £m    £m                     £m
Total turnover                   5,487   1,089   (315)                  6,261
Group's share of                 (1,087) (27)    -                      (1,114)
associates and joint
ventures turnover
                                 
    Trading between group        157     -       -                      157
    and principal joint
    venture

Group turnover             2     4,557   1,062   (315)                  5,304
Other operating income     3     81      (2)     -                      79
Operating costs                  (4,097) (1,250) 315                    (5,032)

Group operating profit     2     541     (190)   -                      351
(loss)
Group's share of operating 4     (816)   2       -                      (814)
profits (losses) of
associates and joint
ventures
Total operating loss             (275)   (188)   -                      (463)

Profit on sale of fixed    5     2       9       -                      11
asset investments and
group undertakings
Amounts written off        6     (535)   -       -                      (535)
investments
Net interest payable       7     (352)   (10)    -                      (362)

Loss before taxation             (1,160) (189)   -                      (1,349)

Profit (loss) before       8     321     (102)   -                      219
goodwill amortisation,
exceptional items and
taxation

Taxation                         (117)   (10)    -                      (127)

Loss after taxation              (1,277) (199)   -                      (1,476)
Minority interests               (1)     -       -                      (1)
Loss attributable to             (1,278) (199)   -                      (1,477)
shareholders

Loss per share             8
                                 
    - basic                       (15.0)p (2.3)p  -                      (17.3)p
                                
    - diluted                     (15.0)p (2.3)p  -                      (17.3)p


Earnings (loss) per share  8
before goodwill
amortisation and
exceptional items
                                 
    - basic                      2.4p    (1.3)p  -                      1.1p
                                 
    - diluted                    2.4p    (1.3)p  -                      1.1p



GROUP PROFIT AND LOSS ACCOUNT

for the three months ended September 30, 2000

                                   BT      mmO2  Discontinuedactivities  Total
                                   Group            and eliminations
(unaudited)                  Notes £m       £m   £m                     £m
Total turnover                     5,389   903   1,311                  7,603
Group's share of associates        (1,308) (99)  (1,354)                (2,761)
and joint ventures turnover
Trading between group and          178     -     -                      178
principal joint venture
Group turnover               2     4,259   804   (43)                   5,020
Other operating income       3     63      2     -                      65
Operating costs                    (3,586) (830) 84                     (4,332)

Group operating profit       2     736     (24)  41                     753
(loss)
Group's share of operating   4     (15)    (80)  103                    8
profits (losses) of
associates and joint
ventures
                                   
    Total operating profit          721     (104) 144                    761
    (loss)


Profit on sale of fixed      5     24      -     -                      24
asset investments and group
undertakings
Net interest payable         7     (275)   (10)  (29)                   (314)

Profit (loss) before               470     (114) 115                    471
taxation

Profit (loss) before         8     488     (51)  152                    589
goodwill amortisation,
exceptional items and
taxation

Taxation                           (105)   (20)  (66)                   (191)

Profit (loss) after taxation       365     (134) 49                     280
Minority interests                 1       -     (25)                   (24)
Profit (loss) attributable         366     (134) 24                     256
to shareholders

Earnings (loss) per share    8
                                   
    - basic                        5.0p    (1.8)P 0.3p                   3.5p   
                                   
    - diluted                      5.0p    (1.8)p 0.3p                   3.5p   
    
Earnings (loss) per share    8
before goodwill amortisation
and exceptional items
                                   
    - basic                        5.3p    (1.0)p 0.8p                   5.1p   
                                   
    - diluted                      5.2p    (1.0)p 0.8p                   5.0p   
    

GROUP PROFIT AND LOSS ACCOUNT

for the six months ended September 30, 2001

                                BT       mmO2   Discontinuedactivities  Total
                                Group              and eliminations
(unaudited)               Notes £m        £m        £m                  £m
Total turnover                  10,921  2,156       238                13,315
Group's share of                (2,188) (57)        (634)              (2,879)
associates and joint
ventures turnover
Trading between group and       322     -           -                  322
principal joint venture
Group turnover            2     9,055   2,099       (396)              10,758
Other operating income    3     179     1           -                  180
Operating costs                 (8,038) (2,473)     429                (10,082)

Group operating profit    2     1,196   (373)       33                 856
(loss)
Group's share of          4     (886)   5           57                 (824)
operating profits
(losses) of associates
and joint ventures
                                
    Total operating             310     (368)       90                 32
    profit (loss)


Profit on sale of fixed   5     129     9           4,357              4,495
asset investments and
group undertakings
Amounts written off       6     (535)   -           -                  (535)
investments
Net interest payable      7     (798)   (20)        (18)               (836)

Profit (loss) before            (894)   (379)       4,429              3,156
taxation

Profit (loss) before      8     521     (204)       88                 405
goodwill amortisation,
exceptional items and
taxation

Taxation                        (219)   (19)        (34)               (272)

Profit (loss) after             (1,113) (398)       4,395              2,884
taxation
Minority interests              (1)     -           (13)               (14)
Profit (loss)                   (1,114) (398)       4,382              2,870
attributable to
shareholders

Earnings (loss) per share 8
                                
    - basic                     (13.9)p (5.0)p      54.7p              35.8p
                                
    - diluted                   (13.9)p (5.0)p      54.4p              35.5p


Earnings (loss) per share 8
before goodwill
amortisation and
exceptional items
                                
    - basic                     3.7p    (2.8)p      0.6p               1.5p
                                
    - diluted                   3.7p    (2.8)p      0.5p               1.4p





GROUP PROFIT AND LOSS ACCOUNT

for the six months ended September 30, 2000

                                 BT       mmO2   Discontinuedactivities  Total
                                 Group              and eliminations
(unaudited)                Notes £m        £m    £m                     £m
Total turnover                   10,311  1,835   2,248                  14,394
                                 
    Group's share of             (2,394) (267)   (2,322)                (4,983)
    associates and joint
    ventures turnover
                                 
    Trading between group        341     -       -                      341
    and principal joint
    venture

Group turnover             2     8,258   1,568   (74)                   9,752
Other operating income     3     150     3       -                      153
Operating costs                  (6,954) (1,604) 161                    (8,397)

Group operating profit     2     1,454   (33)    87                     1,508
(loss)
                           
    Group's share of       4     (86)    (135)   233                    12
    operating profits
    (losses) of associates
    and joint ventures
                                 
    Total operating profit       1,368   (168)   320                    1,520
    (loss)
                           
    Profit on sale of      5     64      1       -                      65
    fixed asset
    investments and group
    undertakings

Net interest payable       7     (478)   (20)    (55)                   (553)

Profit (loss) before             954     (187)   265                    1,032
taxation

                           
    Profit (loss) before   8     966     (71)    331                    1,226
    goodwill amortisation,
    exceptional items and
    taxation


Taxation                         (232)   (40)    (127)                  (399)

Profit (loss) after              722     (227)   138                    633
taxation
Minority interests               (16)    -       (55)                   (71)
Profit (loss) attributable       706     (227)   83                     562
to shareholders

Earnings (loss) per share  8
                                 
    - basic                      9.7p    (3.1)p  1.1p                   7.7p

    - diluted                    9.6p    (3.1)p  1.1p                   7.6p


                           
    Earnings (loss) per    8
    share before goodwill
    amortisation and
    exceptional items

                                 
    - basic                      10.3p   (1.5)p  2.1p                   10.9p
                                 
    - diluted                    10.2p   (1.5)p  2.0p                   10.7p





GROUP CASH FLOW STATEMENT

for the three months and six months ended September 30, 2001

                   Second quarter 3 months     Half year 6 months
                      ended September 30       ended September 30
                    2001          2000           2001      2000
(unaudited)         £m            £m             £m        £m

                    
    Net cash inflow 1,433         1,336          2,687     2,763
    from operating
    activities
    (note 9)


Dividends from      1             -              1         5
associates and
joint ventures

                    
    Net cash        (138)         (191)          (679)     (410)
    outflow for
    returns on
    investments and
    servicing of
    finance


Taxation paid       (144)         (21)           (238)     (140)

Purchase of         -             (267)          -         (4,196)
intangible fixed
assets
Purchase of         (1,204)       (1,026)        (2,240)   (2,064)
tangible fixed
assets
Net sale (purchase) 55            (24)           70        (22)
of fixed asset
investments
Sale of tangible    21            14             138       37
fixed assets
                    
    Net cash        (1,128)       (1,303)        (2,032)   (6,245)
    outflow for
    capital
    expenditure and
    financial
    investment


Acquisitions        (32)          (2,972)        (974)     (5,299)
Disposals           383           -              6,393     92
                    
    Net cash inflow 351           (2,972)        5,419     (5,207)
    (outflow) for
    acquisitions
    and disposals


Equity dividends    -             (863)          -         (863)
paid

                    
    Cash inflow     375           (4,014)       5,158      (10,097)
    (outflow)
    before use of
    liquid
    resources and
    financing


Management of       3,878         516            (3,959)   (5)
liquid resources

Issue of ordinary   107           29             5,983     138
share capital (note
13)
Issue of shares to  -             19             -         19
minorities
New loans           1             231            2         1,627
Repayment of loans  (499)         (4)            (789)     (215)
Net movement on     (4,365)       3,367          (6,297)   8,707
short-term
borrowings

                    
    Net cash inflow  (4,756)       3,642          (1,101)   10,276
    (outflow) from
    financing

Increase (decrease) (503)         144            98        174
in cash

Decrease (increase) 482           (3,966)        11,141    (9,940)
in net debt 
(note 11)

GROUP BALANCE SHEET

at September 30, 2001
                                          September 30     March 31
                                         2001     2000         2001
                                           (unaudited)
                                              (note 1)     (note 1)
                                         £m       £m             £m
Fixed assets
Intangible assets (note 10)              18,557   11,106      18,380
Tangible assets                          21,748   19,057      21,625
Investments                              1,797    8,520       5,204
                                         42,102   38,683      45,209
Current assets
Stocks                                   253      331         361
Debtors                                  6,186    5,624       6,260
Investments                              6,973    2,091       2,557
Cash at bank and in hand                 404      369         412
                                         13,816   8,415       9,590

    Creditors: amounts falling due
    within one year

Loans and other borrowings               6,202    14,800      12,136
Other creditors                          8,239    8,068       8,597
                                         14,441   22,868      20,733

Net current liabilities                  (625)    (14,453)    (11,143)

Total assets less current liabilities    41,477   24,230      34,066


    Creditors: amounts falling due after
    more than one year

Loans and other borrowings               17,704   6,399       18,775

    Provisions for liabilities and       2,763    3,161       2,738
    charges (note 12)


Minority interests                       78       590         499

Capital and reserves
Called up share capital                  2,150    1,639       1,646
Reserves (note 13)                       18,782   12,441      10,408

Total equity shareholders' funds         20,932   14,080      12,054

                                         41,477   24,230      34,066


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